Morning Briefing: Hungary’s Final 2011 Budget Deficit Due

A clearer assessment of the relative strength of Hungary’s economy comes Monday when the country’s 2011 final budget deficit figures are released. They are likely to show a deficit close to 3% of gross domestic product.

Based on European Union accounting norms that don’t include one-off items, the fiscal deficit should reach 2.94% of gross domestic product, the economy ministry said when publishing its preliminary data earlier this year.

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When including revenues from the quasi-nationalized mandatory private pension funds, Hungary should post a surplus of over 3% of GDP in 2011.

But the European Commission has said it will take action against Hungary, including suspending EU subsidies starting next year if Budapest doesn’t rework plans to cut its budget deficit as calculated by EU norms.

Brussels isn’t satisfied that Budapest has been balancing its books with measures–a one-time tax on telecommunications firms, for example–that don’t translate into a permanent improvement in its budget balance

OTHER NEWS

POLAND: Poland remains eligible for a $29 billion credit line from the International Monetary Fund, the fund said Friday, though the country’s authorities plan to continue to treat it as precautionary.

POLAND: The executive board of the National Bank of Poland has approved the finance minister’s request for a bilateral loan to the International Monetary Fund, the bank said in a statement Friday.

CZECH REPUBLIC: Czech leaders clashed Friday over whether the country should hold a referendum on the European Union’s fiscal compact, agreed last December in a bid to contain the euro-zone debt crisis.

SLOVAKIA: The unemployment rate rose by 0.26 percentage point month-on-month in December to reach 13.59 percent, the authorities said on Friday.

HUNGARY: Around 10,000 people demonstrated Sunday in the Hungarian capital in support of an opposition radio station which is being taken off the air by the powerful media authority, amid a showdown with the EU.

HUNGARY: Hungary’s top negotiator with international bodies Friday wrapped up a two-week tour of foreign capitals with reason to hope the country is closer to accessing the financial safety net it needs, thanks largely to a spectacular turnaround by the nation’s prime minister.

BULGARIA: World Bank and European Investment Bank experts will help Bulgaria make better use of European aid funds, the government said Sunday, as it signed memorandums of understandings with the two institutions. The deals, signed in Sofia, call for World Bank and EIB experts to help local authorities prepare and implement projects funded with EU money.

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Emerging Europe Real Time provides sharp analysis and insight into what’s making news in Central and Eastern Europe. Drawing on the expertise of our reporters in the Czech Republic, Hungary, Poland, Russia and Turkey, the site provides an inside track on economics, politics and business in this emerging part of the European continent.